ML24366A045

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Enclosure 2: Proposed Changes for LA-3605-0001, License Application for the American Centrifuge Plant
ML24366A045
Person / Time
Site: 07007004
Issue date: 12/19/2024
From:
American Centrifuge Operating
To:
Office of Nuclear Material Safety and Safeguards
Shared Package
ML24366A069 List:
References
ACO 24-0108 LA-3605-0001
Download: ML24366A045 (1)
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Text

Enclosure 2 of ACO 24-0108 Proposed Changes for LA-3605-0001, License Application for the American Centrifuge Plant Information Contained Within Does Not Contain Export Controlled Information Reviewing Official :

Lori A. Hawk ACO Date:

12/18/2024

LA-3605-0001 License Application for the American Centrifuge Plant in Piketon, Ohio Docket No. 70-7004 Proposed Change lnfo,*mation Contained Within Does Not Contain Export Controlled Inf0t*mation Reviewing Official: __

Lo_ri_A_. l_la_wk~, A_C_O __

Date:

12/18/2024 December 2024

license Application for the American Centrifuge Plant Proposed Change Blank Page December 2024

License Application for the American Centrifuge Plant Proposed Change LICENSE APPLICATION fer the AmerieaR CeRtrifuge Pleet iR Pili:etaR, Ohia Dael~et Na. 70 7004 Revisiae 73 December 2024 LA 3(i05 0001

License Application for the American Centrifuge Plant Proposed Change Blank Page Decern ber 2024

License Application for the American Centrifuge Plant Proposed Change 1.1.7 Roadways December 2024 Two major four-lane highways service the DOE reservation: U.S. Route 23, traversing north-south, and State Route 32/124, traversing east-west.

The reservation is situated approximately three and one half miles from the intersection of U.S. Route 23 and State Route 32/124. There are five major access roads, which connect Perimeter Road to adjoining roads outside the DOE reservation. The major one is the West Access Road (Principal Access Road) from U.S. Route 23, which lies approximately one mile west of Perimeter Road. The North Access Road, which connects to U.S. Route 32 is approximately three miles to the north. The East and South Access Roads connect to secondary county roads. There is also a construction entrance road on the southwest corner of the reservation, which ties into Perimeter Road. This road was used during the original site and facility construction periods. Vehicle traffic access to the Perimeter Road is open to the public but can be shut down as necessary for safety and security concerns, or in support of reservation activities. Service roads throughout the reservation connect to the Perimeter Road with access to the ACP controlled through security portals. The reservation roadways are depicted in Figures 1.1-1 (located in Appendix B) and 1.1-2.

1.1.8 Phased Modular Expansion Plan for the American Centrifuge Plant It is the intent of ACO to deploy portions of the ACP in a modular fashion to accommodate market demand on a scalable, economical gradation. This modular deployment may encompass utilization of cascades of Low Enriched Uranium (LEU) production for LEU customer product or feed material into HALEU cascades. The ratio of LEU cascades to HALEU cascades would be approximately 6 to 1.

1.1.8.1 High Assay Low Enriched Uranium Demonstration The HA LEU Demonstration cascade utilizes a similar centrifuge design to that used for the Lead Cascade. The equipment necessary to perform the enrichment process is in the X-300 I Process Building and consists of product and tails withdrawal system, UF6 cylinders, centrifuges, and supporting systems. The product and tails withdrawal systems use three cold boxes. NaF traps are used for additional withdrawal capacity during dumping. A 308 UF6 cylinder is used for the feed material. Centrifuges and supporting units are placed in the Train 3 area of the X-3001 building. For further plant and process specifics related to the HALEU Demonstration Program, refer to LA-3605-0003A, Addendum 1 of the Integrated Safety Analysis for the American Centrifuge Plant - HALEU Demonstration (Reference 7).

In support of this HALEU Demonstration Program and NRC Materials License (SNM-2011) Condition 23, DOE amended (Amendment 1) the Appendix 1 Lease Agreement between the US. Department of Energy and United States Enrichment Corporation for the Gas Centrifuge Enrichment Plant (GCEP Lease Agreement) (Reference 71 ).

The amended GCEP Lease Agreement renewed and extended the term of the lease through May 31, 2022. The ACO sublease incorporates the terms of the GCEP Lease Agreement. Furthermore, in September 2021, the DOE amended (Amendment 2) the GCEP Lease Agreement to extend the term through December 31,

2025. All other terms of the GCEP Lease as amended by Amendment 1 remained unchanged through the termination or expiration of the current DOE HALEU Demonstration contract period

License Application for the American Centrifuge Plant Proposed Change December 2024 ending on November 30, 2022. DOE is expeeted to eontinue to amend the GCEP Lease in support of the continuation of the HA LEU Demonstration cascade.

On November I 0, 2022, the DOE announced an approximately $150 million cost-shared award to ACO, the Licensee, to demonstrate the nation's ability to produce HALEU. This award builds on DOE's previous three-year cascade demonstration program with the Licensee to manufacture and demonstration the centrifuge enrichment cascade to produce up to 600 kilograms of HA LEU in the form of UF6 for the DOE contract which expires on November 30, 2022.

This new HALEU performance-based contract will have three phases. During Phase I of the new DOE HALEU contract (Reference 74), the Licensee will complete the final steps of centrifuge assembly and clear an operational readiness review (ORR) to start up the demonstration cascade. The Licensee will complete testing once the centrifuges have been installed and process gas (feed material) has been introduced fo llowing the required NRC ORRs. Once the HALEU demonstration cascade is operational, the Licensee will begin enriching UF6 gas to produce 19.75 weight (wt.) percent enriched HALEU, meeting the contract requirement for the initial 20 kilo grams of HAL EU in the form of UF 6. Upon completion of Phase I, ACO plans to continue to produce HALEU under Phase II of the contract up to the currently NRC-authorized possession limits described in Table 1.2-2 of this license application. Phase JI includes production of a minimum 900 kilograms of HALEU to a nominal 19.75 wt. percent 235U. This production will be utilized to resolve any issues with full scale production. Completion of Phases I and TI are considered the Base Contract.

1.1.8.2 High Assay Low Enriched Uranium Demonstration Continuation After completion of the Base Contract as described above, the contract allows DOE to enter into a Phase III, which W£Ould exercise up to three three-year option periods for a eombined total of IO years of production (Phase n and III) at a minimum production level of 900 kilograms per year. The associated possession limit increases supporting the entirety of Phase III to meet the Licensee's planned production are provided within Table 1.2-2 (Appendix D of this license application).

_Performanee of Phases I and II do not guarantee AGO will be authoriz;ed to proceed with the Phase [II option periods of produetion. DOE expeets this duration to approaeh 10 )'ears, ineluding base and all option years, assuming all options are exereised under the DOE contract.

As outlined within the HALEU contract (Reference 74), DOE anticipates that Phase III of the HALEU Operations Contract will be cost reimbursement with incentive fee with no cost share requirements. Amendment 3 of the GCEP Lease (Reference 70) executed on November 30, 2022, states in part, "If the Department exercises its option(s) to extend the term of the HALEU Operations Contract beyond the completion of Phase II of the HALEU Operations Contract, the expiration of the GCEP Lease term shall extend to one calendar year beyond the last day of the applicable HALEU Operations Contract Option Period." Additionally, all other terms of the GCEP Lease as amended by Amendments 1 and 2 remained unchanged.

_The Licensee 'Nould amend the License Application and applieable Supporting Documents to allow eontinued operation of this HALEU cascade with increased possession limits for the requested extended period of operation. ACO's financial assurance and deco1'flmissioning 1-31

license Application for the American Centrifuge Plant Proposed Change December 2024 liability would be established in accordance *.vith the requirements of 10 CFR 70.38, 40.42, and 30.36 and submitted as part of the License Amendment Req1:1est.

This phase wo1:1ld only occ1:1r if parties agree to e*tend the GCEP Lease Agreement in s1:1pport of ongoing planned Licensee activities. In accordance with Materials License Condition 23, the Licensee wo1:1ld provide a copy of the amended agreement to the I>JRC. Additionally, the Licensee wo1:1ld notify the NRG if/*.,..hen a decision is made to transition to this phase seeking approval prior to the implementation of any changes.

1.1.8.3 High Assay Low Enriched Uranium Production A subsequent proposed deployment will be the installation of one or more 120 centrifuge HALEU cascade(s) in Train 3 with HALEU Feed and Withdrawal stations located in Train 4.

1.1.8.4 Expanded Low Enriched Uranium and High Assay Low Enriched Uranium Production The proposed follow: on phase to High Assay Low Enriched Uranium production discussed in Section 1.1.8.3 above will be the addition of one or more 120 centrifuge HALEU cascades and/or LEU cascades and associated Feed and Withdrawal stations in a modular fashion all within the X-3001 building. The HALEU cascades could be fed directly from associated LEU cascades or directly with LEU cylinders.

1.1.8.5 Full ACP Deployment The Licensee will notify the NRC in advance of the transition of the full ACP as previously approved with the initial issuance of Materials License SNM-2011. At that time, the Licensee will request a License Amendment and submit a detailed decommissioning cost estimate and required financial assurance documentation to NRC in accordance with the requirements of 10 CFR 70.38, 10 CFR 40.42, and IO CFR 30.36 for NRC review and approval. Additionally, the Licensee will provide the necessary financial qualification documentation as detailed in Materials License Condition 15.

1.1.9 Material of Construction The ACP facilities are designed and built in a manner to ensure an operating life of at least 30 years. Materials of construction are chosen in accordance with the guidance provided in GAT-901 and GA T-T-3000 (References 25 and 26) to ensure piping and other equipment can maintain a minimum wall thickness during the operating life of the ACP. Corrosion and erosion rates are not anticipated to exceed 0.0025 millimeter per year depending upon material of construction, equipment configurations and flow rates.

This portion of the text has been determined to contain Export Controlled Information and is located in Appendix B of this license application.

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License Application for the American Centrifuge Plant Proposed Change December 2024 Fluor-BWXT Portsmouth, LLC (FBP) is the DOE contractor for D&D of the GDP. FBP is responsible for the D&D of 415 facilities and structures that supported the uranium enrichment operations conducted at the site. During D&D, Fluor-BWXT prepares contaminated facilities for demolition by deactivating utilities and removing stored waste, materials, process equipment such as converters and compressors, and piping.

The plant also includes various support structures that provide feed and transfer operations and site services such as maintenance; steam generation; cleaning; process heat removal; electrical power distribution; and water supply storage and distribution.

Pixelle Specialty Solutions', formerly Glatfelter Specialty Papers, operates a lumberyard on the north edge of the DOE reservation. This facility is utilized as a sorting and transfer area for commercial and paper grade lumber.

1.2.2 Financial Qualifications Under the previous HALEU Contract (Reference 17), DOE agreed to reimburse the Company for 80 percent of its costs incurred in performing the contract. The Company's cost share is the corresponding 20 percent and any costs incurred above these amounts. Costs under the HALEU Contract included program costs, including direct labor and materials and associated indirect costs that are classified as Cost of Sales, and an allocation of corporate costs supporting the program that are classified as Selling, General, and Administrat;ve Expenses. Services provided over the HALEU contract period included constructing and assembling centrifuges and related infrastructure in a cascade formation. When estimates of remaining program costs to be incurred for such an integrated construction-type contract exceed estimates of total revenue to be earned, a provision for the remaining loss on the contract is recorded to Cost of Sales in the period the loss is determined. Our corporate costs supporting the program are recognized as expense as incurred over the duration of the contract term. The accrued loss on the contract will be adjusted over the remaining contract term based on actual results and remaining program cost projections (Reference 22).

On November 10, 2022, the DOE announced an approximately $150 million cost-shared award with ACO, the Licensee, to demonstrate the nation's ability to produce HA LEU. This award builds on DOE's previous three-year cascade demonstration program with the Licensee to manufacture and demonstration the centrifuge enrichment cascade to produce up to 600 kilograms of HALEU in the form of UF6 for the DOE contract which expires on November 30, 2022.

The November 2022 award includes a $30 million cost share during the first year to start up and operate 16 advanced centrifuges in a cascade at ACO's Piketon, Ohio enrichment facility.

This new HALEU performance-based contract (Reference 74) includes cost-shared no-fee coAtraet liAe item Aumbers (CLINs1 and cost-plus-incentive-fee CLINs. ACO is responsible for planning, managing, integrating, and executing the work as described in the DOE contract.

Additionally, this performance-based contract will have three phases. Phase I comprising of one CUN, will be awarded on a cost-reimbursement no-fee basis with a minimum of a 50 percent cost share requirement. Only Phase I shall be priced in accordance with the clause at 1-59

license Application for the American Centrifuge Plant Proposed Change December 202-1 Federal Acquisition Regulation (FAR) 52.216.12, Cost-Sharing Contract-No Fee.

Phase 11, comprising of one CUN, will be awarded on a cost-plus incentive fee basis. Phase lll, comprising of three CLINs, will be divided into three three-year contract option periods with each option period structured on a cost-plus incentive fee basis for continued HA LEU Production.

The Licensee will perform all Phase I work scope under a cost share, no fee contractual arrangement. The Licensee will be responsible for paying a minimum of 50 percent of the allowable incurred co ts during Phase I. DO will reimburse the Licensee a maximum of 50 percent cost share for the remaining allowable costs incurred during Phase I (the Government's cost share may vary depending upon the agreed upon cost share allocation but will not exceed 50 percent). The Licensee's cost share amount is based on the agreed upon cost share percentage of allowable incurred costs, as defined in FAR part 31, with the remaining allowable costs eligible for reimbursement under the DOE contract. Centrus' Annual Report on Form l 0-K, filing date of Mareh 11, 2022February 9, 2024, for the fiscal year ended December 31, 202.J+, provides the Licensee' s ability to meet the financial contractual requirements defined in the HALEU contract (Reference 22).

In support of this HALEU Demonstration Program, DOE amended the GCEP Lease Agreement, in which the parties agree that all work performed under the HALEU Demonstration Contract on leased premises shall be considered a permitted use; any alterations or changes to the premises pursuant to the Demonstration Contract with the DOE shall be a permitted change to the premises; and that any liabilities of the Corporation (Licensee) arising from or incident to the performance of work under the Demonstration Contract with the DOE shall be governed solely by such contract.

Both the GCEP Lease and the Demonstration DOE Gfontract afford indemnification pursuant to the Price Anderson Act. DOE is eKpeeted to eontinue to amend the GCEP Lease in support of the HALEU Operations eontraet. Amendment 3 of the GCEP Lease (Reference 70) executed on November 30, 2022, states in part, If the Department exercises it option(s) to extend the term of the HALEU Operations Contract beyond the completion of Phase II of the HAL EU Operations Contract, the expiration of the GCEP Lease term shall extend to one calendar year beyond the last day of the applicable HALEU Operations Contract Option Period:'

Additionally, all other terms of the GCEP Lease, as discussed above and as amended by Amendments I and 2 remained unchanged.

The Company has long-term nuclear fuel sales and supply contracts in place that extend to 2030; these contracts will provide a stream of revenue for many years and provide a foundation for growth (Reference 22).

At the time of initial licensing and remains as the basis for the initial Materials License approval, the Licensee estimated the total cost to construct the initial 3.8 million SWU capacity for the ACP to be up to $3.1 billion (2008 dollars) (Reference 3) (see Appendix C of this license application), excluding capitalized interest, tails disposition, decommissioning, and any replacement equipment required during the life of the plant outside of normal spare equipment.

The commercial ACP design is modular and can be constructed and installed incrementally over time. As the final commercial ACP phase, the Licensee plans to construct the plant and install centrifuges in increments until the ACP reaches a capacity of up to 3.8 million SWU production annually. As groups of centrifuges are installed, operations will be initiated and will result in 1-60

FOR INFORMATION ONLY license Application for the American Centrifuge Plant Proposed Change December 2024 percent material. The specific authorized uses for each class of NRC-regulated material for the HA LEU Demonstration Program are shown in Table 1.2-4. The Licensee proposes that the license be conditioned as follows:

1) ACP shall not enrich UF6 in excess of 20 wt. percent m u other than in the course of cascade performance adjustments, thus providing the operational flexibility to generate material to satisfactorily fulfill customer orders up to 20 wt. percent m u. ACP shall not input parameters to extract product material for the assay above 20 wt. percent 235U at any time.
2) For HALEU Demonstration, ACO is authorized up to the possession limits currently described within Table 1.2-2 of this license application.
3) Within the ACP Operations, the Licensee will provide a minimum 60-day notice to the NRC prior to initial customer product withdrawal of licensed material exceeding 5 wt.

percent 235U enrichment.

This notice will identify the necessary equipment and operational changes to support customer product withdrawal, storage, processing, and shipment for these assays.

1.2.5 Special Exemptions or Special Authorizations The following exemption to the applicable 10 CFR Part 20 requirements are identified in Section 4.8 of this license application:

UF6 feed, product, and depleted uranium cylinders, which are routinely transported inside the DOE reservation boundary between ACP locations and/or storage areas at the ACP, are readily identifiable due to their size and unique construction and are not routinely labeled as radioactive material. Qualified radiological workers attend UF6 cylinders during movement.

Containers located in Restricted Areas within the ACP are exempt from container labeling requirements of 10 CFR 20. I 904, as it is deemed impractical to label each and every container. In such areas, one sign stating that every container may contain radioactive material will be posted. By procedure, when containers are to be removed from contaminated or potentially contaminated areas, a survey is performed to ensure that contamination is not spread around the reservation.

ln lieu of the requirements of IO CFR 20. I 60 I (a), each High Radiation Area with a radiation reading greater than 0.1 Roentgen Equivalent Man per hour (REM/hour) at 30-centimeters (cm) but less than I REM/hour at 30 cm is posted Caution, High Radiation Area and entrance into the area shall be controlled by an RWP. Physical and administrative controls to prevent inadvertent or unauthorized access to High and Very High Radiation Areas are maintained. The on-site radiological impacts from the proposed exemptions to the requirements of IO CFR 20.1904 and 20.160 I would be minimal and are consistent with previously approved exemptions found in the GDP 1-63

FOR INFORMATION ONLY license Application for the American Centrifuge Plant Proposed Change December 2024 certification. Moreover, pursuant to the regulations in IO CFR 20.230 I, the requested exemption is authorized by law and would not result in undue hazard to life or property.

The following exemption from the applicable 10 CFR 70.50 reporting requirement is identified in Section 11.6.3 of this license application:

  • The IO CFR 70.50(c)(2) reporting criteria require that the ACP submit a written follow-up report within 30 days of the initial report required by IO CFR 70.50 (a) or (b) or by 10 CFR 70.74 and Appendix A of Part 70. In lieu of the 30-day requirement described in 10 CFR 70.50(c)(2), NRC approval to submit the required written reports within 60 days of the initial notifications is hereby requested.

10 CFR 70.17 allows the Commission, upon application of any interested person or upon its own initiative, to grant such exemptions from the requirements of the regulations in this part as it determines are authorized by law and will not endanger life or property or the common defense and security and are otherwise in the public interest. The requested exemption is authorized by law because there is no statutory prohibition on extending the reporting period to 60 days.

Furthermore, granting this exemption request will not endanger life or property or the common defense and security, in that the exemption request does not relieve the ACP from other requirements contained in IO CFR 70.50 (a) or (b) or by 10 CFR 70.74 and Appendix A of Part 70, such as I-hour, 4-hour, and 24-hour reporting requirements for defined events.

The proposed exemption would result only in written reports being submitted within the time limit currently allowed under IO CFR 50.73 for commercial nuclear power plants.

It would be consistent with the exemption granted to the gaseous diffusion plants for reporting of events pursuant to 10 CFR 76. I 20(d)(2) (67 Federal Register 68699, November 12, 2002) and the exemption granted to the Lead Cascade during licensing.

This proposal allows for completion of required root cause analyses after event discovery and fewer supplemental reports, thereby reducing regulatory burden and confusion. Thus, it is clearly consistent with the public interest.

The Licensee notes that the requirements of IO CFR 20.220 I and 20.2203 require written reports of certain events within 30 days after their occurrence. The Licensee is not requesting an exemption from these reporting requirements.

The following exemption from the requirements of IO CFR 70.25(e) and IO CFR 40.36(d) addressing the decommissioning funding requirements is identified in Section l 0.1 of this license application:

License Application for the American Centrifuge Plant Proposed Change December 2024 decommissioning has been provided m the amount of the cost estimate for decommissioning... ".

In support of HA LEU Demonstration Program, as noted in Section 10.1 of this license application, DOE amended the Appendix 1 Lease Agreement between the US Department of Energy and United States Enrichment Corporation for the Gas Centr[fuge Enrichment Plant (GCEP Lease Agreement). Jn the amended GCEP Lease Agreement, DOE assumes all liability for the decontamination and decommissioning of such facilities and equipment installed, and any work performed, under the HALEU Demonstration Contract with the Department including any materials or environmental hazards on the site. Therefore, exempting ACO from any financial assurance for any liability or lease turnover conditions shall be required from the Corporation (Licensee).

Additionally, as stated within the amended GCEP Lease Agreement, the parties agree that should any liabilities of the Corporation (Licensee) arise from or incident to the performance of work under the Demonstration Contract with the DOE shall be governed solely by such contract and any financial protection afforded to the Corporation (Licensee) as a person indemnified under the Act. DOE is e:x.pected to coAtiAue to ameAd the GCEP Lease iA support of the HA LEU OperatioAs coAtract.

The following exemption from the requirements of 10 CFR 70.25(e) and 10 CFR 40.36(d) addressing the decommissioning funding requirements is identified in Section 10.2. l 0.4 and the DFP of this license application:

  • 10 CFR 70.25(e) and IO CFR 40.36(d) require, in part, that "The decommissioning funding plan must also contain a ce1tification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning... ".

In support of future expansion of the ACP, as noted in Section I 0.2. I 0.4 of this license application, the financial assurance for a portion of the decommissioning costs, to include the disposition of centrifuges and UF6 tails, which constitutes a major portion of the decommissioning liability, will be provided incrementally as centrifuges are built/installed and UF6 tails generated.

Full funding for decommissioning of the facilities will be provided in the initial executed financial assurance instrument.

This exemption is justified for the following reasons: 1) It is authorized by law because there is no statutory prohibition on incremental funding of decommissioning costs. 2)

The requested exemption will not endanger life or property or the common defense and security for the fo llowing reasons: the unique modular aspects of the American Centrifuge technology allow enrichment operations to begin well before the full capacity of the plant is reached. Thus, the decommissioning liability for centrifuges and UF6 tails is incurred incrementally as more centrifuges are added to the process, until full capacity of the facility is reached; at which point the UF6 tails are generated at a relatively constant rate throughout the life of the plant. As such, requiring full funding for decommissioning liability, to include centrifuges and UF6 tails disposition, incurred 1-65

license Application for the American Centrifuge Plant Proposed Change December 2024 The following exemption from the requirements of 10 CFR 140.13b crediting DOE indemnity in lieu of nuclear liability insurance as discussed in Section 1.2.2 of this license application.

10 CFR 140.13b requires, that "Each holder of a license issued under Parts 40 or 70 of this chapter for a uranium enrichment facility that involves the use of source material or special nuclear material is required to have and maintain liability insurance. The liability insurance must be the type and in the amounts the Commission considers appropriate to cover liability claims arising out of any occurrence within the United States that causes, within or outside the United States, bodily injury, sickness, disease, death, loss of or damage to property, or loss of use of property arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of chemical compounds containing source material or special nuclear material. Proof of liability insurance must be filed with the Commission as required by§ 140.15 before issuance ofa license for a uranium enrichment facility under parts 40 and 70 of this chapter."

In support of this HA LEU Demonstration Program, DOE amended the GCEP Lease Agreement, in which the parties agree that all work performed under the HALEU Demonstration ~ ontract on leased premises shall be considered a permitted use; any alterations or changes to the premises pursuant to the HALEU Demonstration ~ ontract with the DOE shall be a permitted change to the premises; and that any liabilities of the Corporation (Licensee) arising from or incident to the performance of work under the HALEU Demonstration ~ ontract with the DOE shall be governed solely by such contract. Therefore, the HALEU Demonstration ~ ontract exempts ACO from any financial assurance for any liability insurance during the HALEU ~ ontract period (Phases I, II, and III).

In support offuture expansion of the ACP, in accordance with Section 3107 of the USEC Privatization Act, the Lease with DO for the DOE owned facilities that will be used for the ACP includes an indemnity agreement from DOE under Section 170d of the Atomic Energy Act (AEA) for liability claims.

The Commission may, pursuant to IO CFR 140.8, upon application of any interested person or upon its own initiative, grant such exemptions from the requirements of the regulations in this part as it determines are authorized by law and are otherwise in the public interest. This exemption is authorized by law because there is no statutory prohibition on crediting the DOE indemnity agreement in lieu of nuclear liability insurance. The DOE indemnity agreement contained in the Lease pursuant to DOE's authority in Section 170d of the AEA is sufficient to meet the requirements of Section 193( d) of the Atomic Energy Act of 1954, as amended. Section 193(d) states that "the Commission shall require, as a condition of the issuance of a license... for a uranium enrichment facility, that the licensee have and maintain liability insurance of such type and in such amounts as the Commission judges appropriate to cover liability claims... '

The Lease requires that the Licensee obtain "financial protection to cover public liability, [as defined in the AEA] in such amount and of such type as is commercially 1-71

FOR lNFORMA TION ONLY license Application for the American Centrifuge Plant Proposed Change December 2024 available at commercially reasonable rates, terms and conditions" (Lease at Section 10.l(c)). To the extent required by the Lease, the Licensee will obtain such financial protection and will provide proof of such financial protection to the NRC prior to commencing operations.

The indemnity agreement contained in the Lease will "cover liability claims arising out of any occurrence within the United States that causes, within or outside the United States, bodily injury, sickness, disease, death, loss of or damage to property, or loss of use of property arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of chemical compounds containing source material or special nuclear material.' Section 193(d) affords the Commission the discretion to determine the type and amount of liability insurance that is required to cover liability claims. The Commission has the discretion to conclude that no liability insurance is required in light of the DOE indemnity agreement. Therefore, the requested exemption is authorized by law.

Moreover, the requested exemption is in the public interest since it will facilitate deployment of the ACP, thereby maintaining domestic enrichment capacity using more efficient centrifuge technology. Requiring separate nuclear liability insurance would at best impose an unnecessary financial burden on the licensee and at worst preclude the construction of the ACP if commercial insurance ultimately is unavailable for facilities, such as the ACP, which are located on a DOE owned site. ANI, the only company providing commercial nuclear liability insurance in the U.S., has informed us that it has never insured a facility located on a DOE owned site. Furthermore, the separate liability insurance would not provide a commensurate benefit to the public since the DOE indemnity covers any public liability under Section 170 of the AEA up to the statutory limit of liability. The DOE indemnity agreement in the Lease adequately provides financial protection for the public for public liability as defined in the AEA. Therefore, the requested exemption is in the public interest.

The following exemption from NRC's Materials License Condition 15 related to financial funding as discussed in Section 1.2.2 of this license application.

  • In order to meet the financial qualifications requirements for construction and operation of the facility, the Licensee proposes that the license be conditioned as follows:

Construction of each incremental phase of the ACP shall not commence before funding for that increment is available or committed. Of this funding, ACO must have in place before constructing such increment, commitments for one or more of the following: Equity contributions from ACO, affiliates and/or partners, along with lending and/or lease arrangements that solely or cumulatively are sufficient to ensure funding for the particular increment's construction costs. ACO shall make available for NRC inspection, documentation of both the budgeted costs for such phase and the source of funds available or committed to pay those costs.

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license Application for the American Centrifuge Plant Proposed Change December 2024 Operation of the ACP, with the exception of operation of the HALEU demonstration cascade unti l expiration of DOE's HALEU contract or up to the currently authorized possession limits defined within this Materials License (whichever comes first), shall not commence until the Licensee has in place, either: (I) long term contracts lasting five years or more that provide sufficient funding for the estimated cost of operating the facility for the five year period; (2) documentation of the availability of one or more alternative sources of funds that provide sufficient funding for the estimated cost of operating the facility for five years; or (3) some combination of (I) and (2).

In general, the Licensee's financial qualifications to construct and operate the HALEU 16-centrifuge cascade under the Demonstrations' Contract is demonstrated by the contract with DOE and the Selected Financial Data and detailed Consolidated Financial Statements within the latest information filed with the U.S. Securities Exchange Commission by its parent Centrus.

Under the initial HALEU Contract, DOE agreed to reimburse the Company for up to 80 percent of its costs incurred in performing the contract. The Company's cost share is the corresponding 20 percent and any costs incurred above these amounts. Costs under the HALEU Contract include program costs, including direct labor and materials and associated indirect costs that are classified as Cost of Sales, and an allocation of corporate costs supporting the program that are classified as Selling, General, and Administrative Expenses. Services to be provided over the HALEU Contract period include constructing and assembling centrifuges and related infrastructure in a cascade formation and production of up to 600 kgU HA LEU. When estimates of remaining program costs to be incurred for such an integrated construction-type contract exceed estimates of total revenue to be earned, a provision for the remaining loss on the contract is recorded to Cost of Sales in the period the loss is determined. Our corporate costs supporting the program are recognized as expense as incurred over the duration of the contract term. The accrued loss on the contract will be adjusted over the remaining contract term based on actual results and remaining program cost projections. The Licensee requests an exemption to this condition during the HALEU G£ontract period (Phases I, II, and III).

Under the November 2022 award, ACO will perform all Phase I work scope under a cost share, no fee contractual arrangement. ACO will be responsible for paying a minimum of 50 percent of the allowable incurred costs during Phase I. DOE will reimburse ACO a maximum of 50 percent cost share for the remaining allowable costs incurred during Phase I (the Government's cost share may vary depending upon the agreed upon cost share allocation but will not exceed 50 percent). ACO's cost share amount is based on the agreed upon cost share percentage of allowable incurred costs, as defined in FAR part 31, with the remaining allowable costs eligible for reimbursement under the DOE contract. For Phase 11, DOE will reimburse ACO for the work performed on a cost-plus incentive fee basis. Phase III is divided into three 1-73

License Application for the American Centrifuge Plant Proposed Change December 2024 three-year contract option periods with each option period structured on a cost-plus incentive fee basis for continued HALEU Production. Centrus' Annual Report on Form 10-K, filing date of March l l, 2022February 9, 2024, for the fiscal year ended December 31, 202}_-l-, provides the Licensee's ability to meet the financial contractual requirements defined in the HALEU contract (Reference 22).

Additionally, the Licensee proposes that the license be conditioned as follows regarding the HALEU Demonstration contract (Reference 74):

ACO shall provide at least a 30-day prior written notification to the NRC of anticipated or needed changes to its HALEU Demonstration contract that are material to ACO's license, including contract completion date extensions. Such written notifications shall include the anticipated or needed changes to the contract and the status of DOE's review with respect to a proposed change. If it is not possible for ACO to provide the 30-day prior notification, ACO shall provide the prior notification before the change is made, and as early as possible, with an explanation of why the required 30-day notification time period could not be met.

The following Special Authorization has been identified in this license application:

Surface Contamination Release Levels for Unrestricted Use - items may be released for unrestricted use if the surface contamination is less than the levels listed in Table 4.6-1.

The following exemption from the requirements in IO CFR 95.57(c) is identified in Section 1.17.c) of the Security Plan for the Protection of Classified Matter at the American Centrifuge Plant:

NRC regulations in 10 CFR 95.57(c) require that all classification actions (documents classified, declassified, or downgraded) to be submitted to the NRC Division of Security Operations. These may be submitted either on an "as completed" basis or monthly. The information may be submitted either electronically by an on-line system or by paper copy using NRC Form 790. Historically, the Licensee has utilized NRC Form 790 for each classification action, has compiled them monthly, and submitted them to the NRC. The Licensee must also submit a quarterly classification summary document to the DOE for all derivative classification decisions made during the previous quarter. This dual reporting is burdensome to the Derivative Classifiers and the Classification Officer and creates a situation where the classification actions may be double counted. Accordingly, in lieu of filing its classification actions with NRC, they will be made by the Classification Officer to the DOE at a frequency (e.g.,

annually) and in the format specified by the DOE. These documents wi ll be available for NRC inspection at the facility.

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license Application for the American Centrifuge Plant Proposed Change 10.0 DECOMMISSIONING December 2024 In accordance with NUREG-1520, Standard Review Plan for Fuel Cycle Facilities License Applications (Revision 2), this chapter provides an overview of proposed decommissioning activities for the American Centrifuge Plant (ACP). The ACP is located in a leased area of the U.S. Department of Energy's (DOE) reservation in Piketon, Ohio.

10.1 High Assay Low Enriched Uranium (HALEU) Demonstration Program The Licensee, American Centrifuge Operating, LLC (ACO or Corporation), is deploying a 16-machine AC 1 00M HALEU cascade in leased areas under contract with the U.S. Department of Energy (DOE or Department). In support of this HALEU Demonstration Program, DOE amended the Appendix I Lease Agreement between the U.S. Department of Energy and United States Enrichment Corporation for the Gas Centrifuge Enrichment Plant (GCEP Lease Agreement). The amended (Amendment 1) GCEP Lease Agreement renewed and extended the term of the lease through May 31, 2022. The amended GCEP Lease Agreement permitted the construction and operation of the demonstration cascade by the Corporation (Licensee), the sublessee of the GCEP Lease and holder of the U.S. Nuclear Regulatory Commission (NRC)

American Centrifuge Plant (ACP) Materials License. The ACO sublease incorporates the terms of the GCEP Lease Agreement. Furthermore, in September 2021, the DOE amended (Amendment

2) the GCEP Lease Agreement to extend the term through December 31, 2025. All other terms of the GCEP Lease as amended by Amendment 1 remained unchanged through the termination or expiration of the current DOE HALEU Demonstration contract period ending on November 30, 2022. Amendment 3 of the GCEP Lease executed on November 30, 2022, states in part, "If the Department exercises its option(s) to extend the term of the HA LEU Operations Contract beyond the completion of Phase II of the HALEU Operations Contract, the expiration of the GCEP Lease term shall extend to one calendar year beyond the last day of the applicable HALEU Operations Contract Option Period." Additionally, all other terms of the GCEP Lease as amended by Amendments l and 2 remained unchanged.DOE is expected to contim1e to amend the GCEP Lease in support of the HAL HU Operations contract.

The amended GCEP Lease Agreement includes the following statements pertaining to decommissioning liability:

As of May 31, 2019, the Corporation (Licensee) had fully satisfied the lease turnover conditions and any existing financial assurance provided under Section 4.3 (of the GCEP Lease Agreement) was released, surety bonds were cancelled, and collateral returned to the Corporation (Licensee).

Any facilities or equipment constructed or installed by the Corporation (Licensee) under the Demonstration Contract with the Department shall be included in Exhibit B (of the GCEP Lease Agreement) as Leased Personality and may be returned to the Department in an "as is" condition at the end of the lease term.

The Department hereby assumes all liabilities for the decontamination and decommissioning of the facilities and equipment installed, and any work performed, under the HALEU Operations Contract with the Department including any materials or environmental hazards on the site.

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FOR INFORMATION ONLY License Application for the American Centrifuge Plant Proposed Change December 2024 No financial assurance for any liability or lease turnover conditions shall be required from the Corporation or Sublessee (Licensee).

The parties agree that any work performed under the HALEU Operations Contract on the leased premises shall be considered a permitted use; any alternations or changes to the premises pursuant to the HALEU Operations Contract with the Department shall be a permitted change to the premises; and any liabilities of the Corporation or Sublessee (Licensee) arising from or incident to the performance of work under the HALEU Operations Contract with the Department shall be governed solely by such contract and any financial protection afforded to the Corporation or Sublessee (Licensee) as a person indemnified under the Act.

Pursuant to the modified DOE HALEU Contract, title to depleted uranium hexafluoride (UF6) by-product (tails) from the HALEU enrichment process will be retained by DOE.

At the conclusion of the HALEU Program, the facilities will be either returned to the Department in accordance with the requirements of the GCEP Lease Agreement or the Licensee will amend the ACP Materials License to allow phased implementation of expanded centrifuge enrichment cascades as described in Section 1.1.8 of the license application. At that time, a revised decommissioning funding plan, including an updated decommissioning cost estimate would be provided to the NRC for prior review and approval to reflect any new decommissioning liabilities.

10.2 American Centrifuge Plant (ACP) Decommissioning The Licensee previously requested a 30-year license to operate the ACP. At the end of useful plant life, the ACP will be decommissioned such that the facilities will be either returned to the DOE in accordance with the requirements of the Lease Agreement with the DOE or will be released for unrestricted use. The criteria for final disposition of facilities will be established in the Decommissioning Plan (DP) which, as noted below, will be submitted prior to license termination.

Nevertheless, for the purposes of the License Application for the ACP, the decommissioning discussions in this application and the decommissioning estimated costs are based on decontaminating the plant to the radiological criteria for unrestricted use in IO Code of Federal Regulations (CFR) 20.1402. Information about the Licensee, the location of the site, and the types and authorized uses of licensed material are provided in Section 1.2 of the license application and a description of the site and immediate environs is provided in Section 1.3 of the license application.

Similar to the successful decommissioning efforts for the American Centrifuge Lead Cascade Facility, a more detailed DP for the ACP will be submitted by the Licensee in accordance with 10 CFR 30.36 (g), 10 CFR 40.42 (g), and 10 CFR 70.38(g) and applicable risk-informed NRC guidance provided in NUREG-1757, Consolidated Decommissioning Guidance (Volumes 1 - 3) prior to the time of license termination.

Prior to decommissioning, an assessment of the radiological status of the ACP will be made. Enrichment equipment will be removed, leaving only the building shells and the plant infrastructure, including equipment that existed at the time of lease with the DOE (e.g., rigid mast crane, utilities, etc.).

Classified material, components, and documents will be destroyed or disposed of in accordance with the Security Plan for the Protection of Classified Matter at the American Centrifuge Plant. Requirements for nuclear material control and accountability will be maintained during decommissioning in a manner similar to the programs 10-2

license Application for the American Centrifuge Plant Proposed Change December 2024 in force during ACP operation (NR-3605-0005). Depleted UF6 material (tails), if not sold or disposed of prior to decommissioning, will be sold, or converted to a stable, non-volatile uranium compound and disposed of in accordance with regulatory requirements utilizing facilities constructed by DOE, as authorized by the USEC Privatization Act, and/or other licensed facilities.

Radioactive wastes will be disposed of at licensed low-level waste disposal sites. Hazardous wastes will be treated or disposed of in licensed hazardous waste facilities.

The DP submitted at the time of license termination consists of several interrelated components, including (I) site characterization information, (2) remediation plan, and (3) a final status survey plan. The costs for activities required for these components have been identified in this chapter and estimated in the Decommissioning Funding Plan (DFP). Costs projected were developed based on the experience at the Portsmouth Gaseous Diffusion Plant during the transition to Cold Standby operation and decommissioning cost estimates developed for the American Centrifuge Demonstration Facility. Additionally, the Licensee had performed dismantling and decontamination work at the gaseous diffusion plants. Data and experience from these activities allowed a realistic estimation of expected decommissioning financial expenditures.

Using the cost data as a basis, financial arrangements are made to cover costs required to release the ACP for unrestricted use and to dispose of the tails. Updates on cost and funding will be provided periodically as described in Section I 0.2.10.4.

In accordance with 10 CFR 70.22(a)(9), 30.35, 40.36, and 70.25(a)(l), a DFP (NR-3605-0006) was previously submitted as part of the original license application for the ACP.

The following assumptions are utilized in the plan for decommissioning:

No credit is taken for salvage value of equipment or materials.

Decontamination liability is anticipated in the X-300 I and X-3002 Process Buildings, X-3012 Process Support Building, X-3344 Customer Services Building, X-3346 Feed and Withdrawal Building, X-3346A Feed and Product Shipping and Receiving Building, X-7725 Recycle/Assembly Building, X-7726 Centrifuge Training and Test Facility, X-7727H Interplant Transfer Corridor, X-2232C Interconnecting Process Piping, and miscellaneous cylinder storage yards.

No decontamination is anticipated for the other ACP leased facilities.

Decommissioning estimated costs are based on decontaminating the plant to the radiological criteria for unrestricted use in 10 CFR 20.1402.

The centrifuge assembly area in the X-7725 building is identified as the Decontamination Service Area (DSA). The centrifuge transport system is used to transport the centrifuges from the cascade area to the DSA.

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license Application for the American Centrifuge Plant Proposed Change December 2024 The remaining sections of this chapter describe decommissioning plans and funding arrangements, and provide a detailed examination of the decontamination aspects of the program.

The information herein was developed in connection with the decommissioning cost estimate and is provided for information. Specific elements of the planning may change with the submittal of the detailed DP required near the time of license termination.

The plan for decommissioning is to decontaminate or remove materials from the facilities promptly after cessation of ACP operations. Decommissioning planning begins by incorporating special design features into the plant. These features simplify dismantling and decontamination.

The plans are implemented through proper management of Radiation Protection and Industrial Health and Safety programs for the ACP. Decommissioning policies address radioactive waste management, physical security, and nuclear material control and accountability.

10.2.1 Decommissioning Design Features Specific features are incorporated into the plant design to accommodate decontamination and decommissioning activities. The major features are described below.

10.2.1.1 Radioactive Contamination Control The following features primarily serve to minimize the spread ofradioactive contamination during operation, and simplify the eventual plant decommissioning. As a result, worker exposure to radiation and radioactive waste volumes are maintained as low as reasonably achievable (ALARA).

Areas of the plant are sectioned off into clean areas and potentially contaminated areas, called Contamination Control Zones (CCZs) that have access control requirements.

CCZs are buffer zones established where discrete areas of contamination might be occasionally encountered. Areas that are contaminated are called Contamination Areas (CAs). Figure l 0.2. 1-1 (located in Appendix D of this license application) provides a diagram showing the CCZ boundary. Procedures for these areas are encompassed by the Radiation Protection Program and serve to minimize the spread of contamination and simplify eventual decommissioning.

Non-radioactive process equipment and systems are minimized in locations subject to likely contamination.

This limits the size of the CCZs, and limits the activities occurring inside these areas.

10.2.1.2 Worker Exposure and Waste Volume Control The following features primarily serve to minimize worker exposure to radiation and minimize radioactive waste volumes during decontamination activities. As a result, the spread of contamination is minimized as well.

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